Saskatchewan Premier Brad Wall. File Photo

Sask budget brings sales tax increase, spending slashes

Earlier in the week, Saskatchewan Premier Brad Wall posted a video message online hinting at sales tax increases, and had previously said that everything was on the table when it came to the budget. Both predictions came true.

The biggest spotlight on the budget is an increase to the province’s provincial sales tax, moving from five to six per cent, and a broadening of its reach.

“Saskatchewan is facing a challenge,” the minister said in Regina Wednesday. “Today’s budget is about meeting that challenge.”

The challenge being presented is the effect of low oil prices and Saskatchewan’s dependence on this resource revenue. As prices have spiralled downward, the ugliness of this is beginning to rear its head at the pocketbook of the province.

A deficit of $685-million is budgeted for the upcoming fiscal year, down from a $1.2-billion projection earlier this year. A shortfall of $304-million in 2018-19 is anticipated, with the province turning the corner and returning to balance in 2019-20, with a projected $15-million surplus and $183-million surplus the following fiscal year.

“This budget sets our course, our plan for returning to balance and keeping Saskatchewan’s economy strong for the 1,155,000 people who now call this great province home,” he added.

Doherty added that a return to balance in one year would have been too much of a shock to the economy and government services.

REVENUE SHARING INCREASE FOR LLOYDMINSTER

One aspect of the budget that had mayors and municipal administration on edge surrounded what provincial support for municipalities through revenue sharing would look like in 2017.

Lloydminster was one of the only cities to come out unscathed from the cuts, and will be seeing a $90,000 increase to its portion of revenue sharing from the government, up from $2.13-million in 2016, to $2.22-million this year.

However, it did appear, though the province was directing $36.4-million for its provincial portion of the Clean Water and Wastewater Fund, the desperately needed wastewater treatment facility for the city missed the funding train.

PST HIKE AND REMOVAL OF EXEMPTIONS

The provincial sales tax will be taking a one-point hike from five to six per cent — said to bring in an additional $242-million to government coffers — and some exemptions will be dropped.

As of April 1, PST will be applied to children’s clothing ($15.6-million), restaurant meals and snack foods ($94-million) and construction services, alongside permanently-mounted equipment used in the resource sector ($344-million).

The application of the sales tax on construction services was criticized by the Saskatchewan Construction Association (SCA), who branded it as a “tax against growth” in a statement.

“It makes Saskatchewan less competitive, and less attractive for investors,” SCA President & CEO Mark Cooper said in the statement. “The role of construction is to facilitate and enable growth.”

The move will place Saskatchewan as the only jurisdiction in Western Canada to fully tax construction labour.

The PST will also come into effect on insurance premiums as of July 1.

Alongside this will come an increase in ‘sin taxes’ in the province, with cigarettes going up two cents each and liquor being hit with a 6.8 per cent increase to beer, six per cent for most coolers, four per cent for most spirits and five per cent to wine.

A property tax mill rate adjustment to raise the Education Property Tax contribution for school funding is also being introduced. This will vary based on one’s property value. The mill rates for Lloydminster are calculated differently, and are unique to the Border City. These will be announced in the coming weeks.

To aid in alleviating some of the hit from the sales tax hike, the province has announced personal and corporate income tax rates changes. These will see a drop of 0.5 per cent in both 2017 and 2019. The annual Saskatchewan Low-Income Tax Credit will also be enhanced by $100 per adult and $40 per child.

SCHOOL BOARD AMALGAMATION CURBED

It appears the province will be curbing their proposal to amalgamate all or create larger school boards, and keep local elections and board representation.

“The message was clear and we have listened to that message,” Education Minister Don Morgan said in a statement.

This was a matter that invoked harsh criticism from across the province and had the Lloydminster Public School Division (LPSD) hint it would jump ship and join the Alberta education system if changes were introduced.

LPSD Director of Eduction Todd Robinson in a blog post soon after the budget was brought forward welcomed the move from the government to abandon possible amalgamation.

“It would be an understatement to say that today is a great day for Lloydminster Public and the City of Lloydminster,” he wrote.

He extended his thanks and gratitude to all who engaged in the process and expressed their concerns.

“Without your efforts, today’s decision may simply have went in another direction,” he added in the post.

Despite the good news, some cuts to education are going to be seen.

The 28 school divisions in the province will receive a total of $1.86-billion in school operating funding this year. This is down $22-million from the previous year.

INCREASE TO SOCIAL SERVICES

In an effort to continue to support the province’s most vulnerable citizens, one department not being asked to tighten its belt this year will be social services.

“In this challenging financial situation, our government remains committed to supporting at-risk children and families, people with disabilities, seniors, and low-income individuals and families,” Social Services Minister Tina Beaudry-Mellor said.

They instead will see and increase of $73-million, or 6.9 per cent, bringing their total budget to $1.125-billion for the year.

MIXED MESSAGE FROM HEALTH CARE FUNDING

Though the health care budget in the province is going to see a $38-million increase or 0.7 per cent from 2016-17 to a total of $5.2-billion, some cuts and fee increases are going to be introduced.

As the province begins its move towards one provincial health authority, total funding to these authorities is up 1.2 per cent from the previous year.

The province is also providing $750,000 to begin a human papillomavirus (HPV) vaccination program for boys, expanding availability of the program that began in 2008 for Grade 6 girls.

Long-term care fees will increase for some residents, based on income. The current minimum fee and portion of income is $1,086 + 50 per cent of income. This will change on July 1 to $1,086 + 57.5% of income. The maximum monthly fee will be $2,689, up from $2,065. This is projected to affect about 50 per cent of residents.

Parent mentoring and pastoral care services will no longer be offered in health regions, and will be available only through private services. Chiropractic services will no longer be covered for anyone.

There were also a number of coverage changes introduced. Hearing Aid Plans, Podiatry Services, equipment to help with sleep apnea and orthotics will no longer be covered for anyone, expect for some low-income residents.

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